Last week Mon­day, a team from the In­ter­na­tion­al Mon­e­tary Fund (IMF) con­clud­ed its mis­sion to Port-of-Spain and Scar­bor­ough, dur­ing which they held dis­cus­sions with the T&T au­thor­i­ties on the 2026 Ar­ti­cle IV con­sul­ta­tion .

These dis­cus­sions were most­ly with of­fi­cials of the Min­istry of Fi­nance and the Cen­tral Bank, but al­so with some pri­vate sec­tor or­gan­i­sa­tions.

The Ar­ti­cle IV con­sul­ta­tions last­ed from Jan­u­ary 27 to Feb­ru­ary 9 and on the fol­low­ing day, the IMF mis­sion is­sued a con­clud­ing state­ment, which was con­sent­ed to by the T&T au­thor­i­ties.

In terms of its over­all as­sess­ment of one of the lead­ing in­di­ca­tors of a coun­try’s eco­nom­ic health, the IMF team not­ed re­al Gross Do­mes­tic Prod­uct (GDP) change of -0.7 per cent in 2021, 0.9 per cent in 2022, 1.5 per cent in 2023, 2.5 per cent in 2024 and an es­ti­mat­ed 0.8 per cent in 2025. The pro­ject­ed growth for fis­cal 2026, which is from Oc­to­ber 1, 2025 to Sep­tem­ber 30, 2026, is 0.7 per cent.

One take­away from those IMF sta­tis­tics is that the T&T econ­o­my grew by above 1.0 per cent in 2023 and 2024, but is es­ti­mat­ed to have de­clined to be­low 1.0 per cent in the 2025 fis­cal year and is pro­ject­ed to re­main be­low 1.0 per cent in the cur­rent fis­cal pe­ri­od.

The IMF staff mis­sion said, “Trinidad and To­ba­go’s econ­o­my is grad­u­al­ly re­cov­er­ing to pre-pan­dem­ic lev­els amid per­sis­tent head­winds. The non-en­er­gy sec­tor, par­tic­u­lar­ly man­u­fac­tur­ing and ser­vices, has un­der­pinned re­cent growth, but stag­nant pro­duc­tion in the ma­ture en­er­gy sec­tor has weighed on ac­tiv­i­ty.”

The IMF staffers re­port­ed that the new ad­min­is­tra­tion took of­fice in May 2025, with an eco­nom­ic re­vi­tal­i­sa­tion pol­i­cy agen­da and a fo­cus on re­ju­ve­nat­ing the en­er­gy sec­tor through fa­cil­i­tat­ing work on ma­ture fields, deep­wa­ter ex­plo­ration and fos­ter­ing re­gion­al col­lab­o­ra­tion with Suri­name, Guyana, and Venezuela.

“They are al­so striv­ing to lift non-en­er­gy growth through greater em­pha­sis on im­prov­ing the busi­ness en­vi­ron­ment, en­cour­ag­ing trade and for­eign di­rect in­vest­ment and pro­mot­ing eco­nom­ic di­ver­si­fi­ca­tion,” ac­cord­ing to the IMF staff mis­sion.

That last com­ment by the IMF is, to put it diplo­mat­i­cal­ly, con­testable.

What ev­i­dence does the IMF staff team ad­duce to sup­port its opin­ion that the cur­rent ad­min­is­tra­tion is “striv­ing to lift non-en­er­gy growth?”

Where can one find proof that the cur­rent ad­min­is­tra­tion has placed greater em­pha­sis on “im­prov­ing the busi­ness en­vi­ron­ment, en­cour­ag­ing trade and for­eign di­rect in­vest­ment, and pro­mot­ing eco­nom­ic di­ver­si­fi­ca­tion?”

It is gen­er­al­ly ac­cept­ed that one of the best places to de­ter­mine a gov­ern­ment’s eco­nom­ic pol­i­cy is in its an­nu­al bud­get pre­sen­ta­tion. Can the IMF find ev­i­dence that the cur­rent ad­min­is­tra­tion is “striv­ing to lift non-en­er­gy growth” in the Gov­ern­ment’s first bud­get, which was de­liv­ered on Oc­to­ber 13, 2025?

In that bud­get, the cur­rent ad­min­is­tra­tion im­posed the fol­low­ing:

1) A levy of 0.25 per cent on the as­sets of com­mer­cial banks and in­sur­ance com­pa­nies (which are ser­vice providers) op­er­at­ing in T&T. That levy be­came ef­fec­tive on Jan­u­ary 1, 2026 and is ex­pect­ed to con­tribute $575 mil­lion a year to the Gov­ern­ment’s rev­enues.

In de­liv­er­ing this news in his bud­get pre­sen­ta­tion, Min­is­ter of Fi­nance, Dav­en­dranath Tan­coo said, “Com­mer­cial banks and in­sur­ance com­pa­nies, due to their large size, prof­itabil­i­ty and cap­i­tal­i­sa­tion, have re­port­ed sus­tained earn­ings, high liq­uid­i­ty ra­tios and strong as­set base growth. Con­ser­v­a­tive lend­ing prac­tices and favourable mon­e­tary con­di­tions have dri­ven these out­comes.

“De­spite this, the av­er­age cit­i­zen con­tin­ues to be sub­ject­ed to un­rea­son­ably high fees and near-ze­ro re­turns on their sav­ings and in­vest­ments;”

2) A land­lord busi­ness sur­charge of 3.5 per cent of the gross an­nu­al rental in­come ex­ceed­ing $20,000, which is $1,666.66 a month, plus a one-time reg­is­tra­tion fee of $2,500. This sur­charge ap­plies to com­mer­cial and res­i­den­tial prop­er­ties;

3) An elec­tric­i­ty sur­chage of $0.05 per kWh for com­mer­cial and in­dus­tri­al cus­tomers, which took ef­fect on Jan­u­ary 1 2026, and is ex­pect­ed to con­tribute an ad­di­tion­al $269 mil­lion to the Gov­ern­ment’s rev­enues “at cur­rent con­sump­tion lev­els.”

4) A dou­bling of the Gov­ern­ment tax­es (du­ties) on al­co­hol and cig­a­rettes, but al­so on con­tain­er pro­cess­ing fees and cus­toms de­c­la­ra­tion trans­ac­tion user fees; and

5) A 5 per cent tax on sin­gle use plas­tic.

Out­side of the 2026 bud­get, the Gov­ern­ment al­so im­posed an in­crease in the price of nat­ur­al gas of about 77 per cent to the na­tion’s light in­dus­tri­al and com­mer­cial com­pa­nies (LICs), by way of a let­ter to com­pa­nies in the sec­tor on De­cem­ber 24, 2025 (Christ­mas Eve).

All six of these mea­sures, in one way or the oth­er, neg­a­tive­ly im­pact the non-en­er­gy sec­tor and, quite frankly, con­tra­dict the IMF team’s opin­ion that the cur­rent ad­min­is­tra­tion is “striv­ing to lift non-en­er­gy growth.”

In fact, an ar­gu­ment can plau­si­bly be ad­vanced that by im­pos­ing those six mea­sures, the cur­rent ad­min­is­tra­tion is seek­ing to stymie the growth of the non-en­er­gy sec­tor, which has “un­der­pinned re­cent growth” of the T&T econ­o­my, as the IMF staffers point­ed out.

T&T’s non-en­er­gy sec­tor is al­so a sig­nif­i­cant earn­er of for­eign ex­change, the largest con­trib­u­tor to the coun­try’s tax rev­enue and the na­tion’s largest em­ploy­er.

Why would the cur­rent ad­min­is­tra­tion be seek­ing to stymie the growth of the non-en­er­gy sec­tor, when its pol­i­cy ma­trix should be do­ing every­thing to pro­mote the growth of the sec­tor?

The IMF’s con­clud­ing state­ment out­lines that the 2026 bud­get in­tro­duces “im­por­tant mea­sures to strength­en fis­cal rev­enues, fis­cal man­age­ment, so­cial pro­tec­tion and eco­nom­ic di­ver­si­fi­ca­tion.”

In oth­er words, it seems to me, the Gov­ern­ment is plac­ing its ef­forts to raise ad­di­tion­al rev­enue above the fi­nan­cial health and the con­tri­bu­tion to T&T's eco­nom­ic growth of the non-en­er­gy sec­tor.

In out­lin­ing the six mea­sures above, the IMF team points out that the ap­proved bud­get tar­gets an over­all fis­cal deficit of 2.2 per cent of GDP, “which en­tails an am­bi­tious con­sol­i­da­tion.”

The staff mis­sion states, “Ad­di­tion­al­ly, the Na­tion­al Gas Com­pa­ny is ex­pect­ed to in­crease its div­i­dend pay­ments to the gov­ern­ment, re­flect­ing im­proved re­tained earn­ings from cost-cut­ting mea­sures and the high­er gas prices it an­nounced for its light in­dus­tri­al and com­mer­cial cus­tomers (LICs).

“To­geth­er with tax ad­min­is­tra­tion mea­sures to ful­ly staff and mod­ernise the In­land Rev­enue Di­vi­sion and Cus­toms, these should help strength­en non-en­er­gy rev­enue col­lec­tion. At the same time, the bud­get ex­pands tar­get­ed sup­port for agri­cul­ture, hous­ing, and vul­ner­a­ble groups.”

One hopes the ex­ec­u­tive di­rec­tors of the IMF in­struct the staff mis­sion to con­duct a thor­ough ex­am­i­na­tion of the im­pact of the five rev­enue-rais­ing mea­sures, plus the about 77 per cent in­crease in the price of nat­ur­al gas to the LICs, on the non-en­er­gy sec­tor.

More fis­cal blows com­ing

The IMF mis­sion makes two im­por­tant points about the ap­proved bud­get fis­cal deficit of 2.2 per cent:

* That it is in­ac­cu­rate.

The mis­sion ar­gues that greater fis­cal con­sol­i­da­tion is need­ed to place pub­lic debt on a firm­ly de­clin­ing tra­jec­to­ry, re­build pol­i­cy buffers and safe­guard mar­ket ac­cess.

“IMF staff project an over­all deficit of 5.0 per cent of GDP for FY2026, slight­ly im­prov­ing com­pared to FY2025. Meet­ing the au­thor­i­ties’ 2.2 per cent of GDP fis­cal bal­ance tar­get would re­quire ad­di­tion­al fis­cal mea­sures amount­ing to 2.8 per cent of GDP,” the team said.

Now, the IMF es­ti­mates that T&T’s nom­i­nal GDP in 2026 is $178.8 bil­lion. The 2026 fis­cal deficit out­lined by Mr Tan­coo is $3.865 bil­lion, which is 2.17 per cent of the 2026 nom­i­nal GDP. The IMF mis­sion’s pro­jec­tion of the coun­try’s 2026 fis­cal deficit is 5.0 per cent ($8.94 bil­lion). And, there­fore, the IMF states that T&T re­quires AD­DI­TION­AL FIS­CAL MEA­SURES amount­ing to $5 bil­lion (2.8 per cent of GDP).

The mis­sion states that such a large ad­just­ment would be very dif­fi­cult to im­ple­ment with­out sig­nif­i­cant­ly weak­en­ing growth, giv­en the cur­rent out­look for en­er­gy prices, agreed set­tle­ment of back­pay oblig­a­tions to pub­lic sec­tor union work­ers and ad­di­tion­al hir­ing of pub­lic sec­tor work­ers in Oc­to­ber 2025.

The con­clud­ing state­ment sug­gests ad­di­tion­al “high-qual­i­ty mea­sures,” in­clud­ing:

— Broad­en­ing the tax base by phas­ing out ex­ten­sive ze­ro rat­ings and ex­emp­tions in the VAT;

— Ac­cel­er­at­ing the re­moval of un­tar­get­ed util­i­ty sub­si­dies while pro­tect­ing the vul­ner­a­ble house­holds and

— Stream­lin­ing trans­fers to SOEs; and

­—Im­prov­ing the ef­fi­cien­cy and qual­i­ty of pub­lic ex­pen­di­ture.

* The IMF staff al­so ar­gue that “greater ex­change rate flex­i­bil­i­ty would im­prove the pol­i­cy mix by al­low­ing for a more grad­ual fis­cal con­sol­i­da­tion (0.4 per cent of GDP per year over the next five years), while fa­cili­ti­at­ing ex­ter­nal re­bal­anc­ing by stim­u­lat­ing ex­ports and re­duc­ing im­ports...”

Sound fa­mil­iar?